Posted on 04/14/2005 6:06:40 PM PDT by ken21
GM falls to decade lows after word of SEC subpoena - UPDATE 3
SAN FRANCISCO (AFX) -- General Motors Corp (NYSE: GM - news) . shares fell 6% on Thursday after the beleaguered automaker said it would hand over to U.S. regulators documents relating to an ongoing investigation into the accounting of former unit Delphi Corp (NYSE: DPH - news) . GM's stock plumbed fresh 12-year lows, off $1.67 to close at $26.66, extending its recent decline. Last month, the selling spree reached a fever pitch when GM slashed its outlook for the year, citing weak results in North America. Ahead of the profit warning in March, which led to CEO Rick Wagoner grabbing the reins of GM's struggling U.S. operations, a steady, year-long retreat had already pushed shares down from more than $55 in January of 2004. The latest in unsettling news came when the Securities and Exchange Commission subpoenaed information concerning certain transactions with auto-parts maker Delphi, which spun off from GM in 1999. Delphi's investigation has centered around $237 million in cash payments made to GM in 2000 as well as $85 million in credits received from GM in 2001. Delphi's shares lost 16 cents, or 4.1%, to close at $3.75. A Wall Street Journal report on Wednesday called into question the former parent's role in the accounting of these items. Experts interviewed by the newspaper cast doubt on the quality of GM's earnings. Specifically, the $237 million pretax payment helped the company top analyst targets by one penny a share, as opposed to coming up short 28 cents without it, the Journal reported. The investigation could become yet another headache for GM, which is grappling with rising retiree costs and fierce competition at a time when demand is waning for some of its most profitable vehicles. Meanwhile, GM executives met with union officials on Thursday to discuss, among other concerns, mounting health-care costs. GM is seeking ways to ease the burden of the overhang, but the union reportedly said it wouldn't reopen the labor contract. Smith Barney wasn't surprised by the union's decision, noting that it expects GM to eventually cut its annual dividend in half to $1 from $2, and it added that it 'would not rule out an even steeper cut if it would aid in union negotiations.' Also on Thursday, J.P. Morgan lowered its 2005 and 2006 targets on GM's first-quarter results, which are due next week, citing lower volume assumptions for production of the company's big truck and SUV T-800 and T-900 models. This story was supplied by MarketWatch. For further information see www.marketwatch.com.
s-o-o-o-o sorry.
gm's bloated management, over-paid unions, poorly-designed cars, and resistance to change finally emerge.
the fact is--toyota's and honda's have more quality.
This needs to happen to GM. Lagging designs will be fixed once they finally get it. It'll hurt for a while but they'll be better for it in the long run.
You are absolutely right! GM and GMAC bonds are border line "junk bonds". Should GM continue to mess with the employee benefits, a strike will be called and the once powerful GM will be history.
I am not surprised to find out GM was doing it however.
I dunno if bankruptcy would help or not. But what they really need for the long run is simple: Better design. They're getting their butts munched by Ford, ~and~ Chrysler fer cryin' out loud.
I don't even really like the new Chrysler style all that much, but it definitely shows an outta-da-box style shift. It will work for them. Ford has completely hit one outta the park with the 05 Mustang. They will sell a buttload of those.
GM needs to make some fun cars, and then people will buy them. It is precisely that simple.
When you have 15 billion in assets and 300 billion in debt. What do you expect? Instead of a company it's been acting like a country or something.
The unions have made it nearly impossible to make money on the kind of automobiles GM makes unless they make a lot of them with a good recent design. The 2000 era pickups are an example. Now this model is dated compared to Ford and the imports. Chrysler products are still sh*t and always will be, even though I like the PT Crusier.
This has the potential to make Enron look like a 2-year-old's birthday party.
What's the old saying? "As GM goes, so goes the nation."??
Fasten your seat belts.
Piffle. "As GM goes so goes the nation"??? I think not. Sure, it would be no fun for Detroit and Dearborn, but what about those towns is much fun anymore anyway?
I figure they'll get their act back to together and come back stronger once they finally make stuff that people want to buy.
and if you got any stock in GM now, what are you waiting for? Sell!!
A complete summary, I'd say. Jeez, I'll miss my dad's Oldsmobile. Already dead you say ?
How much longer before Chapter 11? A week or a month?
GM started its season of extra special bad news last week. It's a question of whether the fall will be fast enough to be useful.
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